FEDERAL CIRCUIT COURT OF AUSTRALIA
| APOSTOLIDES v MANTINA EARTHMOVERS & CONSTRUCTIONS PTY LTD | [2018] FCCA 279 |
| Catchwords: INDUSTRIAL LAW – Australian Workplace Agreement – long term employee paid a loading – whether permanent or casual employee – permanent employee entitled to annual leave – dismissal – whether adverse action or discrimination – no adverse action or discrimination – employee dismissed because unable to carry out inherent requirements of the work. |
| Legislation: Fair Work Act 2009 (Cth), ss.26, 44, 90, 113, 323(1), 340, 351, 546 Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Cth), Schedule 3, cl. 28 |
| Cases cited: Actrol Parts Pty Ltd v Coppi [2015] VSC 694 Board of Bendigo Regional Institute of TAFE v Barclay 248 CLR 500 Byrne v Australian Airlines (1995) 185 CLR 410 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 | ||
| Applicant: | MICHAEL JOHN APOSTOLIDES | |
| Respondent: | MANTINA EARTHMOVERS & CONSTRUCTIONS PTY LTD |
| File Number: | ADG 31 of 2016 |
| Judgment of: | Judge Young |
| Hearing dates: | 6, 7 and 8 March 2017 |
| Date of Last Submission: | 8 March 2017 |
| Delivered at: | Darwin |
| Delivered on: | 7 February 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr A Manos |
| Solicitors for the Applicant: | Mahony's Lawyers |
| Counsel for the Respondent: | Mr M Douglas |
| Solicitors for the Respondent: | Finlaysons |
THE COURT DECLARES THAT:
The applicant was employed as a permanent employee by the respondent from 8 May 2000 until 16 August 2015.
The applicant is entitled to be paid for accrued annual leave under clause 6.1 of the Australian Workplace Agreement between the parties (the AWA).
The applicant is entitled to payment in lieu of notice under clause 7.2 of the AWA.
THE COURT ORDERS THAT:
The matter is adjourned to 2 March 2018 at 2.15pm before Judge Young in Adelaide for further submissions.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT DARWIN |
ADG 31 of 2016
| MICHAEL JOHN APOSTOLIDES |
Applicant
And
| MANTINA EARTHMOVERS & CONSTRUCTIONS PTY LTD |
Respondent
REASONS FOR JUDGMENT
The applicant was employed by the respondent…
Keep reading for free
Create a free CaseChat account to read Apostolides v Mantina EARTHMOVERS and Constructions Pty Ltd and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [2018] FCCA 279
- Decision Date
CaseChat Overview and Summary
The central legal issue before the Court was to determine the applicant's employment status, specifically whether he was a casual or permanent employee. This determination was crucial for establishing his entitlement to various statutory and contractual benefits, including annual leave, notice of termination, and redundancy pay. The Court was required to interpret the terms of an Australian Workplace Agreement (AWA) entered into by the parties in 2007, as well as consider the surrounding circumstances and relevant industrial awards that governed the employment relationship.
The Court reasoned that, prior to the AWA in 2007, the applicant was deemed to be a permanent employee by operation of the Quarrying Industry Award, despite both parties mistakenly believing he was a casual employee. This was because the award stipulated that in the absence of a written contract to the contrary, employment was by the week, which is equivalent to permanent employment. The Court found that the AWA, when interpreted in light of the surrounding circumstances, defined the applicant's employment as permanent. This was based on the definition of full-time permanent employment in the AWA, which required working an average of 38 hours per week plus reasonable additional hours, a description that accurately reflected the applicant's work pattern. The Court rejected the respondent's submission that the AWA was consistent only with casual employment, noting that the definition of "Ordinary Hourly Rate of Pay" in the AWA applied to both casual and permanent employees and did not include a specific casual loading.
Consequently, the Court declared that the applicant was a permanent employee under the AWA from May 2000 to August 2015. This declaration entitled him to payment for accrued annual leave and payment in lieu of notice as per the AWA. While the applicant sought civil penalties for contraventions of the National Employment Standards, the Court declined to impose them, finding that the parties had genuinely laboured under a mutual misapprehension about his employment status for many years, and that the applicant had been paid more than award rates as a result. The matter was adjourned for further submissions on the quantum of the entitlements and applicable interest.
Orders
Orders of the court
1.
The matter is adjourned to 2 March 2018 at 2.15pm before Judge Young in Adelaide for further submissions.
FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DARWIN
ADG 31 of 2016
MICHAEL JOHN APOSTOLIDES
Applicant
And
MANTINA EARTHMOVERS & CONSTRUCTIONS PTY LTD
Respondent
REASONS FOR JUDGMENT
1.
The applicant was employed by the respondent as a crushing plant operator in its quarry at Kapunda in South Australia. His employment began in 2000 and he was dismissed in August 2015.
2.
The applicant makes various claims against his former employer which may be summarised as follows:
a) The applicant was a permanent employee rather than a casual employee and is entitled (i) to be paid accrued annual leave under section 90 of the Fair Work Act (“the Act”), (ii) a payment in lieu of notice under section 117 of the Act and (iii) a redundancy payment under section 119 of the Act;
b) The applicant’s dismissal from his employment constituted adverse action because of his physical disability (a previous injury to his right hand) in breach of section 351 of the Act and,
c) In the alternative, the respondent’s failure to provide work or remuneration for the applicant (after his dismissal) was because of the applicant’s exercise of a workplace right (a previous workers’ compensation claim) and/or to prevent the exercise of such a right in future in breach of section 340 of the Act;
d) The applicant was entitled to be paid long service leave under the Long Service Leave Act 1987 (SA) and the respondent failed to pay the long service leave at the time the applicant’s employment ended (in August or September 2015) and did not do so until 26 September 2016 in breach of section 323(1) of the Act; and
e) The respondent breached the applicant’s contract of employment by not providing work or remuneration from early August 2015 which constituted a repudiation which was not accepted by the applicant until 10 December 2015. This was said to give rise to an entitlement to damages in respect of the intervening period.
3.
The applicant seeks payments for unpaid annual leave, including additional superannuation payments, a redundancy payment and a payment in lieu of notice. He seeks compensation for non-economic loss and past and future economic loss which he claims was caused by the respondent’s adverse action, discrimination and breach of contract. Finally, he seeks the imposition of civil penalties.
Background
4.
The respondent operates a large quarry and rock crushing operation. It has somewhere between about 30 employees (according to Mr Obbiettivo’s trial affidavit) and 60 employees (according to an answer he gave in cross-examination). Much of the respondent’s product is sandstone aggregate for use in concrete manufacture. The quarry occupies about 180 ha, including two pits, associated roads and storage areas, crushing plant, a concrete batching area, associated plant and equipment, generator sheds and administration buildings.
5.
The applicant was initially employed as a fitter and diesel mechanic but at some later time became a crushing plant operator. The evidence seems to suggest that in the applicant’s initial period of employment there was only one crushing plant operator employed by the respondent but towards the end of the applicant’s employment there were at least two shifts and at least one other crushing plant operator was employed. The crushing plant is a very large and complex piece of machinery. It is integral to the respondent’s operations and almost 300,000 tonnes of product is crushed each year. There are only about two or three days of product stockpiled at any given time. The crushing plant operator is responsible for all aspects of the crushing plants operation, including supervising the crushing operation and carrying out routine maintenance and repairs. It was not in question that the applicant, as a crushing plant operator, performed a skilled and important role in the respondent’s operation.
Casual or permanent employee?
6.
The applicant was interviewed and engaged by the then managing director of the respondent, Mr Manfred Obbiettivo, according to the applicant, in “late 1999 or early 2000”. Mr Manfred Obbiettivo died in 2003 and the current managing director of the respondent is his son, Mr Rino Obbiettivo. (Any further reference to “Mr Obbiettivo” will be a reference to Rino Obbiettivo). Mr Obbiettivo said that the applicant started work with the respondent “in around 2000”. Mr Obbiettivo annexed to his trial affidavit a reference dated 31 December 2001 given to the applicant for the purpose of a consumer loan. This said the applicant commenced work on 8 May 2000. This date seems consistent with the year-to-date pay recorded on the applicant’s payslip for the period 19 June 2000 to 25 June 2000 and I find that was the commencement date of the applicant’s employment with the respondent.
7.
There is no written record of the terms of the applicant’s engagement. The applicant deposed that Mr Manfred Obbiettivo said that the respondent had not had a “[m]echanic at the quarry for quite a while and as a result there was plenty of work”. He said that Mr Manfred Obbiettivo told him that his hours would be “full time” and that he would be paid a “flat rate of $16 an hour”. He said that he agreed to these terms and he expected his role to be “ongoing subject to Mantina being happy with my work in an initial trial period”. The applicant said that Mr Manfred Obbiettivo never said that his employment was casual and the word did not come up at any time.
8.
It is appropriate to be cautious about evidence given by a party to litigation about a conversation 17 years ago with a person now deceased. However, it is not in issue that there is no evidence of a written agreement containing the terms of the applicant’s engagement in 2000 and there is no suggestion that one was made. It is clear from the applicant’s employment history that he worked full-time hours for the respondent and many additional hours of overtime, other than at times when he was absent from work or on reduced hours due to injury, until the last month or so of his employment in August 2015. Although there is some variation in the hours, ordinarily the applicant’s payslips from the beginning of his employment show 38 hours a week paid at his base rate plus substantial overtime. According to ordinary usage of the phrase the applicant was employed “full-time”. The applicant’s hours of employment were consistent with Mr Manfred Obbiettivo having engaged him on a full-time basis. Similarly, the applicant was initially employed on a flat rate of $16 an hour as is apparent from his payslips.
9.
Ordinarily one would expect a prospective employer and employee to discuss such an important term of an employment contract but for the reason given above I am unable to make any finding about whether there was any discussion between Mr Manfred Obbiettivo and the applicant about whether he was to be employed on a casual or some other basis.
10.
The applicant’s payslips did not say he was employed as a “casual” nor do they contain any express statement that he was paid a casual loading. However, it is not in issue that the applicant was never paid for annual leave. In his trial affidavit the applicant said that he did not want to take annual leave and believed he was accruing it. He said he wanted to accrue it in case he needed it at some later point in his life. He said it was “like having money in the bank”. In cross-examination he also said that he did not take annual leave because he liked what he was doing and considered himself “a fairly important cog in the wheel” of his employer’s operation.
11.
The applicant also admitted in cross-examination that he was not paid for public holidays. Although it was not the subject of specific cross-examination some of the applicant’s payslips appear to indicate this. For example, the payslip for the period 1 January 2001 to 7 January 2001 seems to indicate payment for four days at normal time, recognising a public holiday, plus some over time.
12.
When it was put to the applicant that he had not been paid for sick leave he said that he could not remember taking any sick leave.
13.
The applicant denied that these factors made it clear to him that he was engaged as a casual worker. The applicant appeared to be a man of at least average intelligence. He was articulate and spoke English fluently. I accept that there was no written agreement setting out the terms of the applicant’s employment and his payslips gave no express indication that he was being paid on a casual basis. However, it seems implausible that a worker would not seek to take annual leave at some time during 15 years of employment if he believed he was entitled to such leave. Similarly, the absence of payment for public holidays would seem likely to indicate to a person of ordinary experience and knowledge, such as the applicant, that he may be employed on a casual basis. Although I generally found the applicant to be credible I consider it likely that these factors indicated to him that he was treated as a casual employee at all relevant times. However, for the reasons set out below this is not determinative in my view.
14.
Mr Obbiettivo said in his trial affidavit that apart from three part-time administration staff and the second in charge at the quarry who were “employed on a full-time basis” all other employees, including the applicant, were “casuals”. He said that all casuals were paid a “25% casual loading”.
15.
In cross-examination Mr Obbiettivo conceded that there were other permanent employees of the respondent. He specifically acknowledged five permanent employees including an excavator operator, a mechanic and a blaster and said there could be “blue collar workers” as well. He ultimately suggested he did not know how many permanent employees were employed by the respondent and that Mr D’Allesandro, the company accountant/financial officer, may know the answer. Mr D’Alessandro swore an affidavit in the proceedings but did not address this issue.
16.
Mr Obbiettivo was cross-examined about his statement that the applicant was paid a casual loading. Although conceding there was no express statement on the applicant’s payslips that he was a casual employee he said that the fact that he was a casual employee was apparent from the pay slips. He said that the payslips showed the applicant was paid an “allowance” (it was not described in more detail on the payslip). He said this was paid for each day based on half an hour of an employee’s normal hourly rate without a casual loading. By way of example, he pointed to the applicant’s payslips from early in his employment (the payslip for the period 30 October 2000 to 5 November 2000 is an example) that showed an hourly rate of $16 and a daily “allowance” of $6.90. Mr Obbiettivo said this was an allowance the respondent gave for a half hour lunch break. According to Mr Obbiettivo’s explanation, the difference between $16 and $13.80 (i.e. $6.90 x 2) or $2.20 (or 15.9%) represented the casual loading. When it was pointed out this was not 25% he said that the loading had been increased over time. He said that the 25% rate of the casual loading had not applied “when he [the applicant] started” but changed over time, increasing to what he said was the 25% loading at the time of the applicant’s dismissal.
17.
There are some difficulties with Mr Obbiettivo’s evidence on this subject. As noted, the payslips do not refer to a casual loading. There was no direct evidence that the applicant was paid a casual loading at all other than Mr Obbiettivo’s evidence that its existence could be inferred in the way he described. The allowance also disappeared from the payslips (at least those in evidence) after 12 February 2001 so the basis for the calculation used by Mr Obbietttive was not available over the following years as the applicant’s hourly rate increased. There was no evidence, apart from Mr Obbiettivo’s assertion, that the loading had been increased over time to what he said was the 25% loading at the time of the applicant’s dismissal. There was no evidence about when the amount of the loading increased and no evidence about how or on what basis the loading was calculated or, indeed, if there was any calculation at all.
18.
In recognition of these deficiencies the respondent applied on the third and final day of the hearing to adduce oral evidence from the respondent’s pay clerk who, according to the respondent’s counsel, would give evidence that whenever a pay rise was required for the applicant because of, for example, an industry wide pay increase she would do a calculation to ensure that the applicant’s pay was at least 25% more than the applicable rate in the award. Counsel said that the award used was the Metal Industry Award. He said this was the “wrong” award (the “right” award was said to be the Quarrying Award 2010 in the sense that it covered the applicant’s job and the respondent’s industry). The applicant opposed the respondent’s application and I refused it because orders for filing and service of affidavits of evidence-in-chief had been made months before, the trial had been adjourned once and if the evidence was to be permitted it would probably have necessitated further disclosure and an adjournment to another date.
19.
Nevertheless, the respondent tendered, without objection, a screen shot dated 8 March 2017 of the applicant’s employee details from the respondent’s “Attache” payroll computer program recording the applicant’s “status” as “casual”. It was asserted by the respondent, without demur but without formal concession from the applicant, that the applicant had been described as a “casual” in the respondent’s payroll system since the commencement of his employment.
20.
I consider it likely that the applicant was paid an amount in excess of award rates for permanent employees. I have little doubt that the applicant, who gave evidence that he had negotiated a pay increase with Mr Manfred Obbiettivo on threat of resignation, was generally aware of pay rates and scales and would have taken steps if he believed he was underpaid. Nevertheless, I do not feel I can make a finding that the applicant was paid a specific amount for a “casual loading” in the sense that phrase is commonly used. Similarly, I am not satisfied that the applicant was paid 20% or 25% more than a comparable permanent employee throughout his employment as was required for casual employees under the Quarrying Industry Award and the Quarrying Award 2010 respectively. As noted above, the method of calculating the casual loading suggested by Mr Obbiettivo produced a figure of 15.9%.
21.
The award covering the applicant’s employment has relevance in this context. The agreed position of the parties was that prior to the applicant and the respondent entering into an Australian Workplace Agreement in 2007 the applicant was covered by the Quarrying Industry Award. The Quarrying Industry Award relevantly defined employment categories as follows:
Clause 4.2 Employment Categories
4.2.1 Weekly Hired Employment – Full-Time and Part-Time
The contract of hiring of every employee will in the absence of a contract in writing to contrary, be deemed to be a contract of hiring by the week.
4.2.2 Part-Time Employent
[omitted]
4.2.3 Casual Employment
A casual employee is one engaged and paid as such subject to the following conditions:
4.2.3.1 Casual employees may be employed to cover the absence of full-time employees during a period of annual leave, long service leave, sickness or accident or to fill a special short-term need of an establishment.
4.2.3.2 A casual employee must be paid per hour, 1/38th of the rate applicable for classification of work performed in accordance with the Award, plus 20%.
4.2.3.3 A casual employee must not be engaged on any day for more than the equivalent number of hours worked by weekly hired employees in the establishment.
4.2.3.4 The minimum term of engagement is eight hours.
4.2.3.5 Casual employees must not continue in employment in preference to full-time employees as a result of retrenchments or redundancy for any reasons.
4.2.3.6 A casual employee may apply for a full-time position within a company should a vacancy occur, providing the casual employee is able to perform the duties required to fill the vacant position.
22.
There was no evidence of a “contract in writing to contrary” with the consequence that the applicant was deemed to be employed pursuant to a “contract of hiring by the week”. It was not in dispute that an employee employed pursuant to a contract of hiring by the week was equivalent to a permanent employee. It follows that, regardless of any understanding (or misunderstanding) of the parties, the applicant was, before 2007, not a casual employee but an employee deemed to be hired by the week under the Quarrying Industry Award. He was a permanent employee by force of statute rather than contract: Byrne v Australian Airlines (1995) 185 CLR 410, pp 421-422.
23.
It is also noteworthy that the award required a casual employee to be paid an additional 20%, compared to the 15.9% derived from the calculation suggested by Mr Obbiettivo.
24.
Each of the parties pointed to some other documents that were said to be relevant to the question of whether the applicant was a permanent or casual employee. The respondent relied on a workers’ compensation claim form dated 28 May 2001 that was submitted by the applicant. In answer to the form’s question “What are your normal gross weekly earnings?” there is a handwritten notation, “$16 per hour Casual”. The applicant denied this was his handwriting and said it must have been added after he signed the document. The handwriting is not the same as the handwriting in the rest of the form which was acknowledged by the applicant as his. I am satisfied that the notation was not written by him.
25.
The respondent also pointed to the reference mentioned above dated 31 December 2001 given to the applicant for the purpose of obtaining a loan for a new washing machine. That document contained the description “Employment Status: Casual”. It was put to the applicant in cross-examination that the description of his employment status was correct. His answer was to the effect that he saw it at the time and believed it was an error but he was in urgent need of a new washing machine and did not think it was worth correcting. Consistently with my finding that the applicant probably believed that he was a casual employee I do not accept that answer. The reference also contained the statement “Although Michael is casual, his weekly hours normally exceed 38 per week. He normally works overtime including Satudays (sic) and Sundays if required”. This was written by Mr Obbiettivo and I find it was an accurate description of the applicant’s working pattern at that time.
26.
The applicant pointed to an undated job description for a “Crushing Plant Supervisor”. He was named as the “occupant” and the “type of appointment” was “Permanent”. It appears this document was obtained by a freedom of information application to SA WorkCover. In cross-examination Mr Obbiettivo initially acknowledged the document was accurate but prevaricated when asked about the description “Permanent”. Although Mr Obbiettivo’s signature does not appear on the document it says that it was “approved by” him. Mr Obbiettivo suggested the document was created in relation to the applicant’s workers compensation claim in 2009 but otherwise professed not to recognise it. I consider the document was likely to have been either created or approved by Mr Obbiettivo but otherwise its provenance and purpose is unclear. Whether the job description actually applied to the applicant may be doubted. The parties did not dispute that the applicant’s job was a “crushing plant operator”.
27.
The applicant also pointed to a typed record of a conference between the applicant, Mr Obbiettivo and a rehabilitation provider on 6 May 2009 where the applicant’s “employment status” was described as “full-time”. It was suggested that Mr Obbiettivo had either given this description himself or concurred in it. That is possibly correct. In cross-examination Mr Obbiettivo appeared to struggle to explain the difference between a “full-time” and a “permanent” employee and appeared at times to equate them.
28.
The use of these documents as extrinsic evidence is of limited assistance in my view, reflecting the difficulties in unequivocally describing the nature of the applicant’s employment. This is reinforced by the parties’ ignorance of important elements of the employment relationship and a tendency to reconstruct in accordance with their different interests in the litigation. I have found that, at least until 2007, the applicant was a permanent employee rather than a casual employee because of the operation of the Quarrying Industry Award. Both the applicant and the respondent appear to have been unaware that the Quarrying Industry Award applied. They appear to have been mistaken about the applicable award because, from about 2002, the applicant’s payslips refer to the SA Metal Industry Award. Neither party suggested this was the correct award covering the applicant. No evidence was given about its terms.
29.
By 2007 the applicant had been employed by the respondent on a full-time basis for about seven years. He ordinarily worked at least 38 hours a week and usually worked many additional overtime hours. As crusher operator he was an integral and important part of the respondent’s enterprise. He was expected to be available to work each day on a full-time basis and was so. If he had not been available that would have constituted a considerable obstruction and interference with the smooth running of the respondent’s operation which was not likely to be accepted by the respondent. He was not at any time in his employment before his dismissal in 2015 stood down or told he was not required for work because of fluctuations in the respondent’s requirements for labour. In his trial affidavit Mr Obbiettivo said:
The respondent engages operational employees as casuals because it provides flexibility when we need to increase or decrease employee numbers due to customer demands or when weather means that we cannot operate the quarry. For example, when it is raining or if there has been recent rain, this restricts the activities that we can do, including blasting. In wet weather, we generally roster fewer employees on. Employing casuals allows us to keep wage costs flexible to demand.
I find that this statement has never applied to the applicant.
30.
On the other hand, the applicant was not paid for annual leave or public holidays or sick days and neither he nor the respondent believed he was entitled to be paid for them. He was paid more than the usual hourly rate, apparently under an inapplicable award, but I cannot identify by how much. Because of these matters, and only these matters, both the applicant and the respondent believed he was a “casual” employee. The other attributes of the applicant’s employment, including its long term, regular and systematic nature, were ignored in arriving at this belief. In truth both were mistaken because, if for no other reason, he was deemed to be a permanent employee under the applicable award.
31.
On 28 April 2007 the applicant and the respondent signed an Australian workplace agreement (“the AWA”) under the Workplace Relations Act 1996. The Employment Advocate acknowledged receipt of a declaration form in a letter dated 3 May 2007 and said the AWA started operating from the date of lodgement which I take to be on or about that date.
32.
There was no evidence about any discussions or negotiations leading up the signing of the AWA apart from the applicant’s evidence in his trial affidavit that Mr Obbiettivo said to him “that the Agreement wouldn’t change anything”. The applicant said that there was no practical difference in his work hours or arrangements after signing the AWA. These claims were not contested by the respondent.
33.
According to the applicant’s payslips in February 2007 he was then paid $25.32 an hour. The hourly rate of pay in the AWA approved in May 2007 was $25.62. There was no evidence that the slight increase in pay (1.1%) between the two dates was the result of entering the AWA.
34.
It was not in dispute that the AWA continued to have effect notwithstanding the repeal of the Workplace Relations Act because it was an agreement-based transitional agreement pursuant to cl. 28, Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. It was not in dispute that the applicable modern award under the Fair Work Act, the Quarrying Award 2010, did not apply to the applicant.
35.
The parties agreed that the question of whether the applicant was a casual or permanent employee was to be determined by the construction of the AWA. Neither sought rectification of the AWA nor suggested that it did not reflect the common intention of the parties, objectively determined.
36.
The relevant parts of the AWA are set out below.
37.
Clause 2.4 deals with classification and work requirements. Relevantly it provides:
2.4 Classification and Work Requirements
2.4.1 Your initial appointment under this Agreement is that identified on the Signatory Page. You are, subject to your qualifications, experience and fitness, required to perform all of the tasks of the position, including those tasks that are incidental or of a lower classification to the main functions of your position.
38.
The Signatory Page contains the names and signatures of the signatories to the contract, Mr Obbiettivo and the applicant, and the date of signing. The page also leaves two spaces for the description of the employee’s “Employment Category” and “Classification”. Both have been left blank.
39.
Part 3 defines the categories of employment. Relevantly it provides:
Part 3. Categories of Employment
3.1 Permanent Employment
3.1.1 Full-time Employment
This means that you are employed on a permanent basis and are required to work an average of 38 hours a week plus reasonable additional hours.
3.1.2 Part-time Employment
This means that you are employed on a permanent basis and are required to work less than 38 ordinary hours.
3.2 Casual Employment
3.2.1 This means an employee who is engaged as a casual employee and whose hours of work and employment are subject to the employee’s availability to work and the Company’s need for their services.
3.2.2 There is no obligation on the Company to provide a casual employee with work. Rostering of casual employees is at the discretion of the company.
3.2.3 As a casual employee you are contracted by the hour. You will be paid the appropriate Ordinary Rate of Pay prescribed in clause 5.1.1.
3.2.4 As a casual employee you are not entitled to any leave entitlements (other than long service leave), public holidays, period of notice on termination or redundancy provisions. You are entitled to unpaid carers leave (see Leave provisions).
3.2.5 As a casual employee you may be terminated or resign at any time with one (1) day’s notice. Provided that, this prescription will not affect the right of the Company to dismiss you without notice for misconduct or other lawful cause for summary dismissal.
40.
Part 5 deals with remuneration. Relevantly it provides:
5.1 Rate of Pay
5.1.1 Your Ordinary Hourly Rate of Pay will be (insert $). [in handwriting] $25.62.
5.1.2 The Ordinary Hourly Rate of Pay is an aggregate all-purpose rate that includes all allowances and leave loading that may otherwise apply. The Ordinary Hourly Rate of Pay does not include a site allowance, nor are such an allowance payable.
41.
Part 6 deals with leave and public holidays. Relevantly it provides:
6.1 Annual Leave
6.1.1 If you are a permanent employee you are entitled to four (4) weeks paid annual leave per year. Annual leave will accrue on a pro rata basis each four (4) weekly period at the rate of 1/13 of ordinary hours worked.
…
6.1.5 Annual leave is payable at your ordinary rate of pay (being the applicable ordinary rates described in Schedule 1) for the number of ordinary hours you would have worked during the period of annual leave. Annual leave hours paid will be deducted from your accrued entitlement.
…
6.1.7 Leave loading has been subsumed into your Ordinary Hourly Rate of Pay.
6.3 Public Holidays
…
6.3.2 If you are a permanent employee you will not lose ordinary pay as a result of a public holiday falling on a day that you would normally be rostered to work. You will be paid at the Ordinary Hourly Rate for that day.
42.
Clause 6.1.5 contains a reference to “Schedule 1”. There was no other reference to that schedule in the AWA and there was no such schedule attached to the AWA in evidence. There was no evidence about the reason for that. There is no definition of “ordinary rate of pay” in the AWA and it is unclear what role the reference to Schedule 1 might be intended to achieve in the document. There is no indication in the AWA that the failure to attach such a schedule is consistent only with an objective intention that the AWA create a contract of employment on a casual basis. It is possible, although there was no evidence about the matter, that such a schedule was unnecessary because its function was, in all cases, fulfilled by the specification of the “Ordinary Hourly Rate of Pay” in clause 5.1.1.
43.
The respondent submitted that the reference in clause 3.2.3 to a casual employee being paid the “Ordinary Hourly Rate of Pay” in clause 5.1.1 and the specification of that rate in the AWA was conclusive. It said that this was consistent only with a contract of employment on a casual basis and, therefore, it could be deduced that the objective intention of the parties was to create such a contract. This submission must be rejected. There are express references to the “Ordinary Hourly Rate of Pay” in parts of the AWA that could only apply to a permanent employee. There are two instances. Clause 6.1.7 in dealing with leave loading for annual leave says that the “loading has been subsumed into your Ordinary Hourly Rate of Pay”. The second example is in clause 6.3.2 which deals with public holidays and provides for a permanent employee to be paid on public holidays at their “Ordinary Hourly Rate for that day”.
44.
It is clear that the “Ordinary Hourly Rate of Pay” in clause 5.1.1 applies, in whatever amount is specified, to both casual and permanent employees. Further, the definition of “Ordinary Hourly Rate of Pay” is said to include “all allowances and leave loading that may otherwise apply”. It does not mention any casual loading or any loading for the absence of an entitlement to payment for annual leave or public holidays. There is nothing in the definition or in the use of the phrase elsewhere in the AWA to suggest that it applies only to casual employees. On the contrary, it is clear that it is intended to apply to both casual and permanent employees.
45.
Although the respondent’s primary submission, which I have rejected, was that a plain reading of the AWA logically led to a conclusion that it was a contract of employment on a casual basis its alternative submission implicitly asserted that the contract was ambiguous and sought to rely on extrinsic evidence. The applicant also implicitly asserted that the AWA was ambiguous and similarly sought to rely on extrinsic evidence. Although opinions may differ about whether a particular document is ambiguous I accept that the AWA does not expressly or by necessary implication define the contract of employment as either casual or permanent. To that extent it may be said to be ambiguous. In both cases the extrinsic evidence relied on was largely about the subjective intentions and understandings of the parties at different times in their employment relationship and the largely uncontested practical employment arrangements in place.
46.
The classic exposition of the law on the use of extrinsic evidence in the interpretation of contracts is Mason J’s in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352:
The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meeting… [W]hen the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations expectations of the parties before or at the time of the contract, except insofar as they are expressed in the contract, but to the objective framework of fact within which the contract came into existence, and to the parties presumed intention in this setting.
47.
Although there appears to have been some tendency to relaxation of the requirement for ambiguity for extrinsic evidence to be admitted this is still considered an orthodox statement of the law[1].
48.
As noted above, I have found the evidence of the parties as to their subjective intentions and aspirations to be of limited value, not least because both were ignorant of the true nature of their legal relationship before entering into the AWA. I consider the relevant extrinsic evidence or surrounding circumstances to be as follows:
(a) The applicant was deemed to be a permanent employee by the Quarrying Industry Award from the time he was employed in May 2000 until he entered the AWA in 2007. The applicant was wrongly recorded as a “casual” in the respondent’s internal pay records from the commencement of his employment.
(b) The applicant was employed by the respondent on a full-time basis from May 2000 to August 2015.
(c) The applicant was a skilled worker who performed an important and integral role operating the respondent’s crushing plant.
(d) The applicant worked consistent and regular hours of at least 38 hours a week plus regular hours of overtime.
(e) The employer expected the applicant to be available for work for at least 38 hours in each week during set hours and for additional overtime, sometimes up to 50 or 60 hours a week in total.
(f) Until the last month or so of his employment the applicant was never told not to come to work or told that he was not required because of the operational requirements of the employer.
(g) The applicant was not paid for annual leave or for public holidays and he did not believe he was entitled to be so paid.
(h) Although the applicant was paid more than normal there is no evidence that he was paid a “casual loading” of any particular percentage. The employer was not able to give evidence of any particular calculation of a “casual loading”. The employer’s evidence on this issue was unsatisfactory.
(i) The employer told the applicant before he signed the AWA that “it wouldn’t change anything”.
(j) The applicant’s hourly rate of pay remained substantially unchanged after entering the AWA.
49.
The difficulty (and irrelevance) of relying on subjective intentions is revealed when those intentions are inconsistent or based on mistaken assumptions. As in this case, both parties may have subjectively considered the applicant to be a casual employee or, at least, one not entitled to annual leave or pay on a public holiday and, possibly, other entitlements of a permanent employee. Equally, the parties may have intended that entering the AWA would not “change anything”, unaware that the applicant was actually a permanent employee.
50.
The parties also relied on case law to support their opposing constructions of the AWA. The applicant referred in particular to the decision of Barker J in Williams v MacMahon Mining Services [2010] FCA 1321, 201 IR 123 dismissing an appeal from a decision of Lucev FM (as then was) in Williams v MacMahon Mining Services [2010] FMCA 49, 182 IR 104. In that case an employee entered into a written contract that described him as a casual employee and which specified he would be paid a loading in lieu of paid leave entitlements. The primary judge reasoned that the employee was not a casual employee as “traditionally defined” and that “casual employee” in s.227 of the Workplace Relations Act had the same meaning as the “traditional definition”. He held that the description in the contract was not determinative of the issue. He found that the work was performed according to a stable roster, was not subject to fluctuation and was not irregular or uncertain. There was a mutual expectation of continuity of employment and the employee did not work for short periods of time on an irregular basis. He also found that the payment of a flat hourly rate that purported to include a loading for various leave entitlements was more indicative of a casual employment relationship than not but concluded the employee was not a casual employee. Barker J also noted, referring to Personnel Contracting Pty Ltd (t/as Tricord Personnel) v CFMEU (2004) 141 IR 31, that it is well understood that a description such as “casual employee” will not override the true legal relationship that arises from a full consideration of the circumstances: Williams v MacMahon Mining Services at [38].
51.
After a detailed review of the case law Barker J upheld the primary judge’s conclusion.
52.
The respondent relied in particular on the decision of the Full Bench of the Fair Work Commission in Telum Civil (Qld) Pty Ltd v CFMEU [2013] FWCFB 2434. In that case the relevant employees were subject to an enterprise agreement made under the Work Place Relations Act 1996. The employees were employed on a regular and systematic basis for a particular project and their employment came to an end on the completion of the project. They sought redundancy payments on the basis that they were permanent employees. It was not in dispute that the employees were recorded as casual employees in the company records and this was stated on their payslips. It was not in dispute that they were paid a 25% casual loading as provided for in the enterprise agreement but it was argued that the regular and systematic nature of the employment meant they were permanent employees.
53.
In its consideration of the issue the Commission observed that the specification of casual employment in Federal awards has
… diverged from the (ill-defined) general law position to a position where, by the time of award modernisation process, for many, if not most, Federal awards, an employee was a casual employee if they were engaged as a casual (that is, identified as casual at the time of engagement, perhaps with a requirement of a writing) and paid a casual loading. The Full Bench recognised that this approach has led to a position where employees with regular and systematic hours on an ongoing basis could still be “casual employees” under a Federal award (at [25]).
54.
The Commission observed that the Fair Work Act provides for an interrelated system of National Employment Standards, modern awards, enterprise agreements and, in some cases, workplace determinations or minimum wage orders. It said that, having regard to the objects and purposes of the legislation, the legislature intended that the components of the system should “interact consistently and harmoniously” (at [58]). It said that the legislature intended that the meaning of “casual employee” in one part of the system should be consistent with the meaning given in another part and:
[58] Subject to any terms to the contrary, a reference to a “casual employee” in an enterprise agreement (or agreement based transitional instrument) will have a meaning consistent with the meaning in the underpinning modern award (or pre-reform award/NAPSA).
55.
The Commission distinguished MacMahon Mining Services v Williams on the basis that that decision was concerned with the meaning of “casual employee” in section 227 of the Workplace Relations Act and it was accepted that that Act did not define the expression and so it was given its ordinary common law meaning (at [59]).
56.
These two cases were considered by Flick J in Tomvald v Toll Transport Pty Ltd [2017] FCA 1208. His Honour characterised the “potential divergence” (at [55]) of approaches between them as focussing on the substance of the relationship (at [52]) or the terms of engagement (at [54]). In the case before him his Honour found it was unnecessary to resolve the extent to which there was divergence in the two approaches. He found that the employee was expressly engaged as a casual employee, his employment had the character of casual employment and he remained throughout employed as a casual employee (at [58]).
57.
In this case neither party contended, as in MacMahon, that there was an inconsistency between the formal characterisation of the applicant’s employment and its substance so that a general law definition should be determinative. The respondent submitted that the terms of engagement in the AWA were consistent only with casual employment. I rejected that submission for the reasons given above.
58.
The parties did not submit that there was any relevant definition in the Work Place Relations Act or its successor legislation, the Fair Work Act. However, the respondent did submit, in accordance with the approach in Telum, that its construction of the AWA was more consistent with the legislative system or the underlying award, said to be the Quarrying Award 2010 (notwithstanding that the Quarrying Industry Award applied in 2007). The respondent submitted that the wording of the AWA was similar to the wording of the Quarrying Award 2010 and the AWA should be construed consistently with it. There are difficulties with this submission. First, the Quarrying Award 2010 was not in force in 2007 and there is nothing to suggest that the parties were (or could have been) aware of its terms in a way to indicate an intention that the AWA be construed in conformity with it. Secondly, the categories of employment in the Quarrying Award are full-time, part-time and casual rather than permanent and casual (and clause 10.2 requires the employer to inform the employee in writing of their category of employment). A full-time employee is defined as “an employee who is employed to work an average of 38 ordinary hours per week.” A casual employee is defined as “an employee employed and paid as such” and must be paid 1/38th of the weekly ordinary time rate of pay for their classification plus a casual loading of 25%. I take “employed … as such” to mean engaged as such.
59.
I cannot see that these definitions shed any light on the construction of the AWA. The applicant was, I have found, employed to work at least 38 hours a week so that is consistent with employment other than casual under the Quarrying Award 2010. The basis of his engagement in 2007 is not clarified by the definition of “casual employee” in an award that came into force three years later.
60.
Both the approaches in MacMahon and Telum are of limited application in the circumstances of this case and, ultimately, I am left to characterise the employment by reference to the AWA and the surrounding circumstances when it was made.
61.
The AWA defines full-time permanent employment as follows: “This means you are employed on a permanent basis and are required to work an average of 38 hours a week plus reasonable additional hours”. The use of the word “permanent” as part of the definition has a degree of circularity but its ordinary meaning suggests an indefinite or long term of employment and would exclude temporary or short term employment. The other part of the definition refers to a requirement to work 38 hours a week and reasonable additional overtime. In my view the applicant’s employment satisfies each of the elements in this definition.
62.
The AWA defines a casual employmee as “… an employee who is engaged as a casual employee and whose hours of work and employment are subject to the employee’s availability to work and the Company’s need for their services”. The applicant was initially engaged as a permanent employee due to the operation of the Quarrying Industry Award. I have found that the respondent expected the applicant, both when his employment was governed by that award and under the AWA, to be available for work for at least 38 hours in each week during set hours and for additional overtime. He was engaged on those terms both at the beginning of his employment and under the AWA. He was not employed on the basis of his availability and the respondent’s need for his services. On the contrary, he was expected to be present daily during set hours for a minimum of 38 hours a week plus additional overtime. These factors are inconsistent with casual employment as defined.
63.
The belief of the applicant and the respondent that he was not entitled to annual leave or payment for public holidays was certainly mistaken for the period between the commencement of the applicant’s employment in 2000 and signing the AWA in 2007. Nevertheless, this points to a belief of the applicant and the respondent that he was a casual employee. I do not consider this factor to be decisive. An employee may mistakenly believe he is a casual employee and not a permanent employee: Tomvald v Toll Transport at [65]. The evidence did not clearly show the applicant was paid as a casual employee. Although the evidence indicated that the applicant was paid more than normal it did not show he was paid a “casual loading” of any particular percentage of normal pay, still less the 20% casual loading required under the Quarrying Industry Award or the 25% casual loading under the Quarrying Award 2010.
64.
I consider the correct interpretation of the AWA is to define the applicant’s employment as permanent.
65.
It follows that applicant has unpaid entitlements for annual leave and payments in lieu of notice under clause 7 of the AWA.
Set-off?
66.
The respondent submitted that if I found that the applicant was entitled to payments for annual leave then there should be a “set-off” against those entitlements of the amounts that were said to have been paid in excess of his entitlements as a permanent employee. The basis of the claimed right of set-off was not addressed in more detail by the respondent. There are a number of difficulties with such a claim. Counsel for the respondent said that there ought to be a set-off in his written submissions during the trial but the factual basis of such a claim was not pleaded in the respondent’s further amended response. A set-off is usually understood to mean the setting-off of mutual debts or the raising of some other equitable or legal claim in defence. A set-off must be capable of being pleaded as a separate action and recoverable by action. If the claim cannot be sued for separately it cannot be pleaded as a set-off[2]. The respondent did not say what action might constitute its claim for set-off. It is possible to imagine some kind of restitutionary claim based on mistake but in the absence of pleadings that is speculation.
67.
A claim described as “set-off” but possibly more like a defence was advanced by the respondent in Williams v MacMahon Mining Services. There the respondent argued that the effect of having paid a “casual loading” to an employee, later found by the court to have been a permanent employee, was that the employee was paid in advance for annual leave as part of the flat hourly rate. The argument went that the respondent therefore had a defence to the claim because on termination there were no monies payable for leave accrued and not taken: MacMahon at [60]. The court rejected that argument on the basis that section 173 of the Workplace Relations Act rendered such an attempt at contracting out of the relevant minimum employment standards to be of no effect. A similar approach under the Fair Work Act was considered by the Full Bench of the Fair Work Commission in Canavan Building Pty Ltd [2014] FWCFB 3202. There an employer applied for approval of an enterprise agreement containing a term that sought to meet the entitlement of permanent employees to annual leave by paying an increased hourly rate. The Full Bench found that such a term would be in breach of the National Employment Standards and, in particular, sections 91, 92 and 93 of the Fair Work Act.
68.
The respondent also submitted that I should take into account the applicant’s workers compensation award and redemption of future income support. It was not suggested that there was any prospect of double payment and I can see no other basis on which the workers compensation payments could be relevant: CFMEU v Hail Creek Coal Pty Ltd [2016] FCA 1032, [53].
69.
I am not satisfied that the respondent is able to raise any relevant claim, whether by way of set-off, defence or otherwise, against the applicant’s entitlement to payment for annual leave.
Claims of discrimination and adverse action
70.
The applicant was injured at work in March 2009. He was operating the crushing plant when his right hand became caught in a conveyor belt. He suffered a degloving injury as a well as a crush injury to his right hand and fingers. After surgery and rehabilitation he returned to work. It is not necessary to trace in detail the history of the applicant’s workers compensation claims (there were other minor claims in 2001, 2006 and 2014), the various assessments of his capacity for work over the period or the various changes made to the applicant’s working arrangements to deal with his incapacity. He received workers compensation payments for income support until 30 June 2015.
71.
On 30 June 2015 the SA Workers Compensation Tribunal made an order by consent in the following terms (so far as is relevant):
1. The decision of the Compensating Authority dated 1 May 2015 and issued pursuant to Section 43 of the Act is VARIED to the extent that the worker is entitled to a lump sum of $158,569 based on a 43% Whole Person Impairment of the upper extremity, right hand, wrist and digits as assessed by Dr Jennings in his report of 10 December 2014.
2. …
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.